Credit Suisse sues Softbank over $440 million investment

Credit Suisse anticipates and launches a case against SoftBank in the UK and has hired Queen’s Counsel to put together the case.

Swiss banking major Credit Suisse has launched legal action against Softbank Incorporation in an effort where millions of dollars of claims owed by the Japanese conglomerate, marking a further deterioration of the relationship that has grown following the collapse of Greensill Capital.

The lawsuit relates to $440 million in funds that were owed to one of Swiss Bank’s wealthy customers by Katerra, a US construction company. Katerra was funded by Softbank’s Vision Fund and was a client of Greensill Capital, have filed for bankruptcy in June earlier this year with more than $1 billion in liabilities.

The Swiss banking major blamed the collapse of Greensill Capital after the unexpected bankruptcy of Katerra’s former lender. Greensill lent the company $440 million, packaged the debt and sold it to Credit Suisse. On Greensill’s part, it marketed the debt as low-risk investments

Earlier this year those funds rose to more than $10 billion in size before being suspended by Credit Suisse.

Late in 2020, Softbank agreed on a deal to infuse money into Greensill which was intended to cover the debt repayments of Katerra. But later media reported that cash never reached Credit Suisse. Credit Suisse is now evaluating its options through summoning the Softbank executives including chair and chief executive Masayoshi Son through the US courts.

In US court fillings, Credit Suisse claims that Softbank masterminded the entire financial restructuring of Katerra in late 2020 during which Greensill Capital agreed to write off the $440 million debt in exchange for an equity stake in Katerra.

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